Do Successful Companies Value Social Responsibility and Ethics in Marketing in India?

Do successful companies value Social Responsibility and Ethics in Marketing in

India?

Prof. Sudeep Chatterjee*

Introduction

India, the second largest democracy, saw the initiation of the first generation of reforms in 1991

under the stewardship of the then finance minister Dr. Manmohan Singh, followed by the second

generation of new reforms in the post 2001 era.

India has the largest population of middle class in the world and is the second fasted growing

economy after China with an 8% plus GDP growth rate. In the purchasing power parity terms,

India is among the top four of the world and is ranked the world’s 12th largest economy. To tap

this huge market we have large National and International marketing companies operating here in

the FMCG, Durables and services sectors. Most of these companies are highly successful in terms

of profitability-the bottom line, sales revenue-the top line and even market share and growth

rates.

However, there are concerns raised about the value these companies place on social responsibility

and ethics in marketing in their quest for maximisation of profits. This paper hopes to develop an

understanding on the scenario in India on these issues and suggest the directions which can take

our corporate towards social entrepreneurship and become corporate citizens.

Social Responsibility and Marketing Ethics

The issues of marketing practices and ethics and social Responsibility are considered to be

contradictions almost an oxymoron to most people. Marketing professionals have faced criticism

both in USA and India about their activities which harm consumers, like deceptive practices, high

pressure selling, high prices, shoddy or unsafe products, planned obsolescence, and poor service

to disadvantaged consumers.

фЂ‚ѕ Deceptive practices- Deceptive practices fall into three groups; pricing, promotion, and

packaging.

• Deceptive pricing: Announcing super discount offers and attracting customers through

false advertising, subsequent visits prove that merchandise attracting maximum discounts

is out of stock and the retail prices are kept unethically higher before extending high

discounts.

• Deceptive promotion: Luring customers to the store with promises which are

unreasonable and then setting new terms to the scheme once purchase is made.

Misrepresenting the product’s features or performance to misguide consumers.

• Deceptive packaging: Exaggerating package contents through subtle design, using

misleading labelling, or describing size in misleading terms.

Since profitable companies value long term customer relationships which are based on trust and

value, using deceptive practices can prove to be very costly in the long run.

фЂ‚ѕ High Pressure Selling- Most of the time consumers are talked into buying

unwanted and unneeded things by salespeople using high pressure selling. Sales people use

smooth and canned talks to entice purchase by consumers and often its a case of sale and not a

buy. In USA there are laws that control telephone and door to door salespeople and they